Conn. Hedge Fund Hit With Fraud Lawsuits

Oct 26 2010 | 3:30am ET

Federal and state regulators came down hard on a Connecticut hedge fund yesterday, accusing it of overvaluing its portfolio to overcharge investors by tens of millions of dollars.

Southridge Capital Management and CEO Stephen Hicks cooked up a bogus value for their funds' largest holding based almost entirely on the company's acquisition of two companies controlled by Hicks, the Securities and Exchange Commission and Connecticut Banking Commissioner alleged. Southridge and Hicks also lied to investors about the firm's strategy.


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